Leading Australian dairy processors have rejected a commitment from the federal opposition to set a minimum floor price for farmgate milk sales, labeling the policy as “vague” and “problematic”.

Labor agriculture spokesman Joel Fitzgibbon announced last week that Labor would task the Australian Competition and Consumer Commission with testing the efficacy of a milk floor price and to make recommendations on the best design options.

Some of the biggest names in dairy processing were taking part in a panel discussion at the Australian Dairy Conference the day after the policy was announced.

Bega Cheese CEO Paul van Heerwaarden said he’d spoken to Mr Fitzgibbon since the announcement and was concerned about how much thought had gone into the policy development.

Mr van Heerwaarden said Mr Fitzgibbon was keen to set a price based on the cost of production which he noted varied according to different milk systems, locations and seasonal conditions.

“If I talk to farmers up in northern Victoria, the cost of production at the start of the season when water cost 100 bucks and now its costing 550, the cost structure is changing within the year,” he said.

“How do you practically set this?

“We always, as an industry, will do things that are going to be better for improving returns, particularly for farmers, but if they (the government) get in the way and they cause a poor decision to be made, it’s going to be problematic.”